Banking news: Alaska banks performing well, offering a host of convenience services.

• Author: Barbour, Tracy

The banking industry is thriving around the country and in Alaska, with financial institutions offering an array of products and services to satisfy customers' demand for convenience, flexibility and security.

The U.S. banking industry reported its sixth consecutive record earnings year in 2006, according to the Federal Deposit Insurance Corp (FDIC), which insures deposits at the nation's 8,854 banks and savings associations. Likewise, Alaska also reported strong net income in 2006.

Similar to what's happening nationally, Alaska institutions experienced margin declines with a slight median net interest margin fall from 4.90 percent a year earlier to 4.87 percent at year-end 2006, based on the FDIC's 4th Quarter 2006 Alaska Profile. That's still the fourth highest net interest margin in the United States, says FDIC spokesperson Frank Gresock.

Median interest income rose on a year-over-year level from 6.14 percent to 6.64 percent. During the same period, median interest expense rose from 1.30 percent to 1.95 percent. And the median pre-tax net income for Alaska-based institutions was down at 1.56 percent from 1.66 percent a year earlier. "This was still the eighth highest level among the states," Gresock says.

Earnings at Alaska institutions remain strong, ranking among the top 10 for their median net interest margins and pre-tax income levels. However, concerns exist for rising past-due levels, along with high concentrations of commercial real estate and commercial and industrial loans, Gresock says. He adds: Median overall past-due loan levels rose to 1.84 percent as of year-end 2006 from 0.73 percent one year earlier.

Alaska ranked highest in the country for both past-due commercial real estate (non-farm, non-residential) loans, as well as for construction and development loans.

Alaska ranked 10th highest among the states for commercial and industrial loan delinquencies.

At the same time, Alaska financial institutions continue to broaden their offerings with electronic banking and other options that save customers time, money and effort. They're expanding beyond online banking and bill pay services to offer special credit products, creative mortgage financing, advice-based services, online security, and fraud prevention and education. This article highlights some of the banks operating in the state-in no particular order-in terms of their views on the industry, latest offerings and other developments.

KEYBANK N.A.

Necessity may be the mother of invention, but it's customer preferences that drive many of the product offerings at KeyBank Alaska. Customers have a strong penchant for multiple service delivery channels, says President KeyBank Alaska District, Brian Nerland. The thirst for automation and round-the-clock access to service has resulted in 24-hour call centers, ATMs and online banking. But while these channels have changed the banking industry, the desire for human interaction hasn't diminished.

"We have not seen a drop in the desire for branches, drive-ups and being able to meet face-to-face with a banker," Nerland explains. "It's kind of an interesting phenomenon in that there is still a demand for the human element."

People simply want more ways to reach out to their bank, Nerland says. And KeyBank offers a variety of options to help them do just that. For example, consumers can access their accounts online, view statements, and inspect front and back images of their checks as a safety measure. And the bank's Positive Pay service makes it easier for commercial clients to identify fraudulent checks. Positive Pay allows clients to share check issue information with the bank before checks are released for payment. Discrepancies between client issue information and...